How to Budget for Your Upcoming Kitchen Remodel

It’s no secret that a kitchen remodel is a big deal. After all, you’ve decided to change one of the most used rooms in your house. Now what?

Not sure where to start, some homeowners prepare by gathering kitchens photos for inspiration. Others start by shopping around for new appliances, countertops, or flooring. You may find yourself mulling over the options for upwards of a year before finally pulling the trigger and starting to interview a designer or contractor.

Before getting too far into the weeds, there’s one thing that you need to consider above all else: budget.

But setting a budget is more than just crunching a few numbers. It requires research, and here are the first 10 things to factor into your budget so your renovation won’t bust your pocketbook:

Decide how much you want to spend. Sounds obvious, right? But deciding how much you want to spend on a kitchen remodel — and sticking to it, at that — is harder than you think. On average, an upscale kitchen remodel costs more than $80,000. Take a serious look at your finances to determine whether this is the route you want to go. If you can swing it, then ask yourself how long you plan to live in the home. Someone selling it in the next five years should consider the remodel an investment, and only spend what you’ll get back at closing. Someone staying put for more than five years should consider comfort. Will the remodel work for your family? From there, factor in the neighborhood. Can it support the investment? You may end up losing money when over-improving a kitchen — or any other room, for that matter — in a middle-class neighborhood.

Get an idea of how the costs will break down. Your biggest expense will often go to cabinets, but labor and appliances can also take up a sizeable chunk of your budget. This is how costs typically break down:

Plan for the unexpected. All the planning in the world can’t prevent those sometimes-costly surprises, and that’s especially true when remodeling older homes. Our company conducts a feasibility study to cut down on the unexpected, but we still encounter the odd surprise when opening a wall, for example. That’s why it’s so important to leave some wiggle room in your budget to cover these situations. A good rule of thumb is to set aside about 20 percent of your budget to handle what may be lurking behind the walls or under the floorboards.

Work up a list of must-haves. There’s a reason you decided to renovate your kitchen, and it’s a good idea to write it down to ensure you fulfill your ultimate goal. Is it more room? A better layout? New appliances? Compile a list of must-haves for you to be happy with the remodel, and prioritize them from the top down. When setting priorities, you get an idea of what’s most important to you, and you won’t be swayed by those little things that add up pretty quick.

Determine how you’ll pay for the project. The options are many to pay for a kitchen remodel. Cash-in- hand is the most obvious, but you can also use a home equity loan, personal loan, or refinancing. Whatever you choose to use, make sure to factor in costs like interest and origination fees. What’s more, find out when you’ll get those funds. Contractors require you to make deposits throughout a project, and paying for materials up front isn’t uncommon.

Ask yourself where you’ll live during the project. Some people stay in their homes during a renovation. That means you’ll need to figure out where to set up your makeshift kitchen — and whether it’ll come with any additional costs. If you choose to live someplace else, make sure to work that expense into the budget. But don’t just account for the cost of an apartment or hotel room. Work in any storage or moving fees you may incur for moving off site.

Consider the cost of eating out. No one can see into the future, but you’ll probably opt to eat out — or order in, really — during your kitchen renovation. Sit down and work out how many times you’ll realistically bring home some take-out.

Think about what you can do on your own. Just because you’re hiring a contractor doesn’t mean you can’t roll up your sleeves and do a little work yourself. Taking out old cabinets or removing appliances isn’t necessarily something you need to pay someone else to do — and it’ll cut down on your costs.

Resist temptation. Remember that list of must-haves. Refer to it often, especially if you find yourself daydreaming about the newest-fangled kitchen features — and there’ll be a lot of them. Stick to the priorities. Otherwise, consider your budget blown.

Create a spreadsheet. Work up a spreadsheet for what you’re going to spend on your kitchen renovation. Create a line item for every detail to keep track of what you’re going to spend. If you see overruns, put a stop to them.

If you’d like to learn more about kitchen remodeling, and how to keep costs in check, our team would be happy to discuss your options. We’ve also put together a few cost-effective packages to make a kitchen remodel more convenient than before.